Hargreaves prepares for RDR boost as profits jump 30%

Hargreaves Lansdown has reported a 30% boost to profits in the last six months of 2012, and argued it was poised to benefit from a trend towards execution-only services as advisers exit financial services under the retail distribution review (RDR).

Hargreaves has reported a £93.7 million pre-tax profit for the six-month period, up from £72.0 million over the same period of 2011. Assets under administration rose from £26.3 billion to £30.4 billion over the six months.

Chief executive Ian Gorham (pictured) said the RDR was having 'no negative impact' on the business and that it would benefit from a move towards execution-only investing.

‘We note that (net) over 1,200 financial advisers left Financial Services Authority authorisation in the 18 months to 31 December 2012, over 4% of the entire industry. We remain of the view that a general trend towards DIY investing is likely to be beneficial to our cause, as people discover the value and efficiency to be gained through self-directed activity and a Hargreaves Lansdown account,' he said.

Hargreaves has tripled the number of employee members signed up to its workplace investment service, Corporate Vantage. The service, which currently has 64 schemes live or to be implemented, has 10,200 employee members, up on the 3,569 members in 2011, with assets at £222.4 million, an increase of 67% in the last three months.

Gorham added: ‘Despite continued economic uncertainty in the UK, Hargreaves Lansdown has had the scale, financial strength and market presence to continue to improve its position.'

Hargreaves attracted 21,000 new clients in the first half of 2012, an increase on 16,000 new clients over the same period in 2011.

The execution-only platform Vantage’s assets under administration increased to £29 billion in second half of 2012 from the £22 billion reported in the same period in 2011 with client numbers up by 5%

Assets on the company’s portfolio management service also increased to £1.8 billion in the last six months of 2012 from the £1.5 billion reported in the second half of 2011.

The company also reported a £1.2 million Financial Services Compensation Scheme bill over the six months.

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